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TMI Blog1972 (9) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... d K. S. HEGDE. JUDGMENT The judgment of the court was delivered by JAGANMOHAN REDDY J.- This appeal is by certificate and though no reasons have been given for the grant of it, the learned advocate for the respondent does not contest that a question of law does arise and has not objected to the certificate. The question that was referred to the High Court by the Tribunal under section 66(1) of the Indian Income-tax Act, 1922 (hereinafter called "the Act"), is as follows: " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that in the matter of calculation of undistributed balance of the total income of an assessee for the purpose of levy of super-tax in terms of section 23A(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per-tax can be levied in respect of those dividends. This submission was rejected by the Income-tax Officer who sought to assess the respondent by including Rs. 15,000 and Rs. 90,000 declared as dividends at the general meetings held on December 17, 1959, and May 26, 1960, in respect of the relevant assessment years. An appeal to the Appellate Assistant Commissioner was unsuccessful. The Tribunal, however, on a reading of the relevant parts of the section came to the conclusion that in computing the undistributed balance of the total income not only the income-tax and super-tax payable by the company but also any other tax levied by the local authority, etc., are to be deducted but also "dividends actually distributed, if any", which are th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to a reserve fund under section 17 of the Banking Companies Act, 1949 (10 of 49), the Income-tax Officer shall, unless he is satisfied that, having regard to the losses incurred by the company in earlier years or to the smallness of the profits made in the previous year, the payment of a dividend or a larger dividend than that declared would be unreasonable, make an order in writing that the company shall, apart from the sum determined as payable by it on the basic of the assessment under section 23, be liable to pay super-tax at the rate of fifty per cent. in the case of a company whose business consists wholly or mainly in the dealing in or holding of investments, and at the rate of thirty-seven per cent. in the case of any other com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e previous approval and consent of the Inspecting Assistant Commissioner, will get jurisdiction to make an order if at the time of the passing of the order it is found that the company has not distributed by way of dividends within twelve months immediately following the accounting year less than the statutory percentage of its total income of the accounting year as reduced by the amount of taxes payable by the company and in the case of banking companies the amount actually carried to a reserve fund under a statutory compulsion. Though the Income-tax Officer has jurisdiction to pass an order under sub-section (1) he has to make a regular assessment on the company under section 23 which he cannot do if in fact a dividend had been declared b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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